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Unraveling the Nuclear Renaissance

By Matthew L. Wald August 31, 2012 12:32 pmAugust 31, 2012 12:32 pm

Power plants are a bit like insect eggs. At the start, there are huge numbers, but few of them make it to adulthood.

The last few days may have seen the demise of two reactor projects that had looked promising a few years ago, when the economy was strong and people worried about the high price of natural gas and the possibility of a price on carbon emissions. But natural gas is at historic lows, carbon charges seem unlikely, and lately neither reactor project has looked likely.

Texas is short of generating capacity, but it has vast amounts of natural gas and a highly competitive electric market, both of which make it hard to build a reactor.

Exelon had not said exactly when it would build, but it took advantage of a provision in a reformed nuclear licensing system to seek early approval of a 11,500-acre site southeast of the city of Victoria. The licensing system now allows companies to get “early site permits” and “bank” the sites, and later match the preapproved site with a preapproved reactor design, potentially shortening the time between deciding to build a reactor and getting it into operation. Exelon was one of the first to try it out.

The company faced opposition from people who said there was not enough water in the area and that the ground was subject to subsidence that could wreck a cooling pond. The Nuclear Regulatory Commission might well have approved the site over these objections, but the company said the economics were not favorable.

That plant was originally a joint venture between Constellation Energy, which owned the adjacent Calvert Cliffs 1 & 2, and the French. But two years ago that consortium, called Unistar, fell apart when it could not obtain a loan guarantee from the Department of Energy on terms that Constellation found acceptable. (Constellation was later bought by Exelon.)

Under an American law from the cold war era, reactors must be controlled by American entities. One purpose of the law was to keep American secrets in American hands, which may be inappropriate now since Électricité de France has more recent experience building power reactors than American companies do, and was seeking to build one of a French design.

The judges gave Électricité de France 60 days to show evidence that it was bringing in an American partner. After that, if it wanted to proceed it would have to redo some steps in the application process. But, like Texas, the economics in Maryland are similarly awful.

Two projects, each with two reactors, are under way, one in Georgia and one in South Carolina, but no additional groundbreakings seem very likely soon.

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